Gold Starts Week on Two-Week Low

The Market Gage - Dillon Gage's Precious Metals Newsletter

The price of gold starts off the week at a two-week low. A stronger dollar and recent conversations with some Fed presidents have taken the “bull” out of the market for the short term.

Some domestic refinery employees I spoken with say, “inventories on some products are building on the shelves and not moving, so to increase our cash flow we have no choice but to drop premiums.”

Far East selling overnight has pushed silver below the $ 19.00 level, as bidders in the gray metal seem to be avoiding the market because of the lack of demand seen for physical products. Some silver traders have adopted a wait and see position before jumping back into the market.

Looking at the United States mint website, it’s clear how slow the Silver Eagle demand has been over the last few months. Let’s look at the numbers:

  • May 2016: 4,498,500 one ounce coins sold
  • Jun 2016: 2,837,500 one ounce coins sold
  • Jul 2016: 1,370 ,000 one ounce coins sold
  • Aug 2016: 580,000 one ounce coins sold (Thru Aug.18th)

In comparison from the same months last year:

  • May 2015 2,023,500 one ounce coins sold
  • Jun 2015 4,840,000 one ounce coins sold
  • Jul 2015 5,529,000 one ounce coins sold
  • Aug 2015 4,935,000 one ounce coins sold

Comparing the last three full months year to year, the United States Mint has seen a decline of 30 percent and August 2016 sales looks like it’s shaping up to be down 77 percent from Aug. 2015.

So to say a cloud has developed over the market might be an understatement, but one always has hope that in the end, negative interest rates, a possible meltdown of economies in Europe and the effect here at home of our presidential election will boost the price and start up demand in our markets once again. Remember these days, a rally back in the price of Gold and Silver is virtually
a news story away.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.